Thursday, July 15, 2010

NewsThe financial regulation bill
Highlights of the compromise legislation to overhaul financial rules.U.S. June producer prices fall 0.5%; core rises 0.1%
U.S. wholesale prices fell a seasonally adjusted 0.5% in June, marking their largest decline since February, led by lower food prices.U.S. pockets $20.6 bln in sin taxes in FY'09
The U.S. federal government collected $20.6 billion in taxes on alcohol, tobacco, firearms and ammunition in fiscal year 2009, up 41 percent from the previous fiscal year.Jobless claims sink to near 2-year low
The number of Americans filing for initial unemployment insurance dropped to the lowest level in nearly two years last week.Lost decade: The new threat to the U.S. economy
Now some economists are starting to talk about an even worse fate: a prolonged period of very weak growth, a so-called "lost decade."China's economic growth eases to 10.3%
China's GDP grew at an annual rate of 10.3% during the second quarter of 2010. The pace slowed from the 11.9% growth posted in the first quarter.Industrial Production in U.S. Rose 0.1% in June
Industrial production in the U.S. unexpectedly rose in June as higher temperatures across the nation led to increased utility use. Factory output, which makes up 75 percent of the total, declined the most in a year.The Fed's broken crystal ball
The latest forecasts from the Fed cut estimates for economic growth, predicted that high unemployment will be more persistent than previously thought and raised the risk of a deflation.Signs of the Stimulus
Some Call it Transparency, Others Another Example of Government Waste.Payday: Trial lawyers could get major tax cut despite major federal deficit
According to a Legal Newsline report from the annual meeting of the American Association for Justice, the nation’s lobbying arm for trial lawyers, the industry may get a tax break from the U.S. Treasury Department that would give trial lawyers the ability to write off expenses involved in contingency fee cases much in the same way businesses write off expenses. But unlike businesses, lawyers will benefit from the tax write-off in addition to the fee they charge clients.Companies pile up cash but remain hesitant to add jobs
Nonfinancial companies are sitting on $1.8 trillion in cash, roughly one-quarter more than at the beginning of the recession.As Tax Cuts' Expiration Date Nears, Little Consensus
President Barack Obama wants to extend the Bush-era tax cuts for the middle class only. Many House Democrats want to extend them for that group, too, but perhaps only for a year or two. Republicans, and a handful of centrist Democrats, are talking about extending all the tax cuts.Public Policy Polling: Obama approval hits record low
45% of voters approve of the job he’s doing while 52% disapprove. This is the first time he’s topped the 50% disapproval mark in our surveys.Rousing the Spirits of Business to Create More Jobs
Optimistic forecasters say the U.S. economy is likely to grow at a bit better than a 3.5% annual pace over the next 12 months, but even they say that will leave unemployment at a still-high 9% or so a year from now. The moderately pessimistic, whose ranks are growing daily, foresee growth a full percentage point or more slower. The seriously pessimistic are talking "double dip."The Crippling Costs of Obesity in the Workplace
...private employers are hit with an estimated $45 billion a year in medical expenditures and work loss, according to a 2008 report by the Conference Board (the latest report available).Richmond Fed chief opposes bail-outs
Jeffrey Lacker told the Financial Times that markets must have clear expectations about how short-term creditors would be treated in a bank failure. “Ambiguity about that was just deadly over the past few years coming into this crisis,” he said.

BlogsU.S. Trade Deficit Improves
The trade data showed good news on the export and import front, with U.S. exports up 17.7 percent, imports up 21.4 percent from the first five months of last year.Morning Bell: Why the Obama Stimulus Failed
A new CBS poll out today shows that 74 percent of Americans believe the Obama stimulus either damaged the economy or had no effect.GOP Spending Cap
Republicans on the Senate Appropriations Committee have announced support for caps on the discretionary spending portion of the federal budget.The Stolen Auto Sales
Remember back in 2009, when critics were claiming in the Cash for Clunkers program would just steal demand from the future? Well, about a year later here is some evidence that could be attributable that.Spending Can Be Cut
It’s time for lawmakers and the policy community to start acting like real people with real money and to start excising those billions from the nation’s bloated budget.Bill Gates Gets It
If we want to move forward on fixing our institutions, we have to get an accurate picture of how badly they’re being mismanaged, and eliminate those harmful practices.Jobless Claims: Take the Latest Drop with a Grain of Salt
Aside from the usual disclaimer about not reading too much into a one-week trend, there are additional complications with the claims data right now resulting from some seasonal quirks.Reid’s Cap-and-Trade Doublespeak
...Reid’s assumption of voter stupidity might actually outreach Kerry’s, because he also seems to think that chanting “utilities only” will fool people into thinking that, somehow, they won’t ultimately pay the price of higher energy costs resulting from the need of power generators to pay for carbon emissions.The CEA's Impossible Job
The stimulus act instructed them to do the (nearly) impossible. Perhaps someday someone will conduct a study that credibly measures the macroeconomic effects of this particular fiscal stimulus. But it won't be easy. And it won't look much like the study released today.Big Box Stores Don’t Produce Big Tax Gains
So-called big box stores like Wal-Mart and Home Depot produce few tax revenues relative to their size, according to a presentation by Peter Katz, Sarasota County, Fla. Director of Smart Growth.More on Debt Collection
My commenters offer wise advice. One points out something I neglected to mention: do not pay the debts of dead people. Many collectors will attempt to collect from children. That's a matter for the estate, not the kids, and if there is no meaningful estate, the debt dies with them. Do not let an unscrupulous collector tell you otherwise.Another Credit Market Regulation, With a Twist
The bottom line here is that those who are supporting legislation to chase out payday lenders are portraying themselves as the humanitarians, but it is they who are denying some of the poorest among us access to the credit they need to put food on the table between paychecks or to not have to wait what might be a crucial few days to buy medicine for their children.The road to poverty
As I say in The Choice, self-sufficiency is the road to poverty. I’m liking this Keynes fellow less and less.Minority-Owned Businesses Grew at Fast Rate From 2002-2007
The number of minority-owned businesses grew nearly 46% between 2002 and 2007, more than twice the rate of all U.S. businesses, according to a new U.S. Census Bureau’s survey of business owners.What is the Fed Thinking? and What is the Fed Thinking, 2?
...the Fed could be thinking that setting an inflation dial to 3 percent is not an option. For small changes in Fed policy, the inflation rate will not be affected. And if the Fed goes beserk, the result will be to move us into the regime of high and variable inflation rates, which will actually be worse.Just Say No to Extending the Bush Tax Cuts
...a temporary extension is simply going to make it harder to let them expire next year, for the same reasons that the AMT keeps getting "fixed" on an annual "temporary" basis. It is going to be hard enough, psychologically, for people to give up tax breaks they have had for ten years. Stretching it out longer just makes the pain more fierce.

"In January 2009, you published an economic analysis of Obama's stimulas $787 billion plan and forecast that if Congress were to pass this plan
1. The unemployment rate would remain below 8%
2. Non-farm payroll employment would increase to 137.6 million by the fourth quarter of 2010
3. 90% of the jobs created would be in the private sector.

Now let us compare your promises with reality
1. Since the stimulus was enacted the unemployment rate has never been below 8%. It has been up to 10.1% and is currently at 9.5%
2. In June 2010, non-farm payroll employment was 130.5 million, 7.1 million payroll jobs short of your forcast
3. Since February 2009, only the federal government has added payrol jobs. The private sector has actually lost 3.3 million payroll jobs.

Clearly, Obama's stimulus plan failed to work as you predicted. Instead this recovery has been unusually weak for one after a severe recession. Turning to the long-term consequences of the Democrats' economic policies, one sees higher taxes, heavy regulation, gaping federal budget deficits, and soaring federal debt."

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This blog is a weekday economic buzz, news, opinions, blogs, research and data aggregated by the Joint Economic Committee, Republican staff. Disclaimer: The content posted here is provided for information uses only and should not be construed as the views of the Joint Economic Committee Republicans.